Are you positive you didn't update the system menu? If you updated to 4.2 and are still running from Ios60 as opposed to Ios70.....
Have you tried re-installing HBC? If that fails, re-run hackmii installer, then re-installing HBC?
@ OP- Not really sure what else you can try, If mauifrog makes an appearance he might be able to help. (don't PM him please)
As mentioned above, reinstalling hackmii might help. Won't hurt.
Damn I suck!!!!